Leftist leader wants to repair, not privatize Mexico's oil industry

MEXICO CITY -- Mexico’s most prestigious leftist leader on Monday challenged President Enrique Peña Nieto’s proposal to open the national oil industry to private investment, setting the stage for what is sure to be a pitched political battle.

Cuauhtemoc Cardenas said the state oil monopoly, Pemex, is in dire need of repair, but that amending the Constitution, as Peña Nieto plans, is unnecessary and makes Mexico’s resources dangerously vulnerable to outside exploitation.

Instead, Cardenas offered an eight-point plan that would give Pemex financial and administrative autonomy, relieving it, he said, of the onerous state bureaucracy that cripples its ability to grow and become more efficient [link in Spanish]. The plan would also lower Pemex’s tax burden; currently, the company pays up to 70% of its revenue to the government.

Cardenas also called for a national referendum to measure public opinion on the sensitive issue. The goal, he said, was “to modernize, not privatize” Pemex.

Cardenas is the son of revered President Lazaro Cardenas, who nationalized the Mexican oil industry 75 years ago.

He presented the rival platform on behalf of the main leftist political faction, the Democratic Revolution Party, during a brief rally at the Revolution Monument in Mexico City, attended by hundreds of supporters.

Peña Nieto most likely has the votes he needs in Congress to pass the bill he has proposed, thanks to his Institutional Revolutionary Party and the all-but-certain support of the conservative National Action Party. But the left has the potential to stir bitter debate and galvanize public opposition to the president’s plan, a cornerstone of his young government’s agenda.

Under the government proposal, Pemex would enter into profit-sharing agreements with private firms, including foreign ones, to explore Mexico’s still vast oil and gas fields.

Opponents fear opening Mexico’s natural resources to multinational corporations, which they describe as potentially abusive and greedy. And many do not trust the government to oversee private investment, convinced that profits will remain in the hands of a few well-connected members of the Mexican elite.